What happens if a Lambda fails?

I'm curious to know, what are the implications if a Lambda function fails to execute successfully? Does it affect the entire application or just a specific part? What mechanisms are in place to ensure that such failures are handled gracefully and that the system can recover quickly? Is there a way to monitor and alert when a Lambda fails, so that appropriate actions can be taken to mitigate any potential impact? Additionally, are there best practices for designing Lambda functions to minimize the risk of failure in the first place?